CA100+ investors warn corporates to step up on Just Transition

Just Transition is a 'moral imperative and economic necessity' says Anne Simpson, calling for action on 'at pace and scale'.

Three members of the Climate Action 100+ global steering committee have warned that companies on the group’s focus list need to step up social commitments and actions related to energy transition after they performed poorly in an initial Just Transition benchmark assessment.

Anne Simpson, former sustainability chief at CalPERS and now global head of sustainability at Franklin Templeton, said the Just Transition was a “moral imperative and economic necessity”. She described the inclusion of Just Transition indicators in the benchmark as “vital” and praised companies that were focusing on the topic, but said more action was needed “at pace and scale”.

François Humbert, lead engagement manager at Generali Insurance Asset Management, said that managing risks to those affected by the net-zero transition was part of investors’ fiduciary duty. Citing the recent impacts of high energy prices, he warned that Just Transition efforts should go beyond mitigating impacts on the labour force and consider the effects on communities and supply chains, including considerations on energy availability, reliability and affordability, especially in countries with a high fossil fuel share.

Seiji Kawazoe, senior stewardship officer at Sumitomo Mitsui Trust Asset Management and chair of the CA100+ global steering committee, said that while ensuring clean energy supply was “essential” in Asia, it was “critically important” to avoid “negative aspects of local pollution” and protect “those who are the most vulnerable to climate change in a… transition to net zero”.

The most recent update to CA100+’s company progress tracker included a trial Just Transition assessment, looking at company actions and commitments across eight metrics including public statements on the Just Transition, consultation with local communities on the net-zero transition, and commitments to “retain, retrain, redeploy and/or compensate workers affected by decarbonisation”.

In the assessment, 73 percent of the initiative’s 166 focus companies met none of the metrics, while just under 11 percent met three or more. No company met all eight. The results showed that a majority of the largest global emitters are not sufficiently prepared to deliver a Just Transition, CA100+ said.

The calls come as investors across the globe step up their focus on the Just Transition. Canada’s national equivalent of CA100+ – Climate Engagement Canada – said it would integrate indigenous concerns into its Just Transition benchmark assessments, and would include labour representatives in its planning so that “workers are not being sidelined in discussions that affect their jobs and their future”.

In the UK, pension provider Scottish Widows told RI that it would engage with portfolio companies to consider the social impacts of their transition plans and called on the government to appoint a Just Transition minister or advisory committee. Newton Investment Management and Ninety One wrote to 100 oil and gas companies in May calling on them to take steps to ensure a Just Transition.